Insurance Brokers

While taking out insurance is a necessity for most South Africans in this ever-changing and often volatile country and world in which we live, navigating and understanding the various insurance products offered by the multitude of insurance companies specialising in many different areas of insurance, can more than often be confusing.

Insurance policies, ranging from car and household insurance to health and life insurance, are often shrouded in confusing fine print, terms and conditions, and hard-to-understand insurance jargon that can make it difficult for the average person to make head or tail of them, and lead to costly misunderstandings down the line.

This is where insurance brokers or agents come in. They are the people who make their living from selling and promoting a wide range of insurance products and services to consumers and businesses alike on behalf of the various insurance firms, in return for commissions paid by the firms based on the number and size of the insurance policies sold.

Insurance brokers can work independently or for firms housing a number of insurance brokers. These firms are more commonly known as insurance brokerages and usually pick a few select insurance companies whose products they promote and sell to their clients.

Provided they are any good at what they do, insurance brokers learn all they can about the insurance companies and their products and services in terms of insurance policy documents, pay outs, exclusions, fine print, terms and conditions and so forth.

The benefit is that once they have identified the precise insurance requirements of their clients, they can advise them accordingly as to the best and most effective insurance companies and policies suited to their particular insurance needs. They can also take on the responsibility of being able to explain clearly and concisely in jargon-free, easy-to-understand language exactly what their clients' insurance policies cover and what the fine print entails.

However, in recent years more and more insurance companies are emerging in South Africa that encourage consumers and businesses alike to contact and deal with them directly and, in doing so, bypass the 'middlemen' or the insurance broker.

While in the short term going 'direct' may save consumers a few Rand here and there in terms of their monthly insurance premiums, in the long term in the event of a client having to make a claim, they will not have the luxury of an insurance broker to fall back on and translate the insurance jargon and fine print that the insurance company will be reciting, often causing clients a lot of confusion and panic resulting in stress and an unpleasant experience.

This is where insurance brokers are very good as acting as 'buffers' between the insurance companies and the policyholders, which can create a comfortable win win situation for all parties.

For instance, policyholders are happy because they can rely on their insurance broker for good advice, service and attention, allowing them to rest assured in the knowledge that their insurance requirements are being comprehensively met and dealt with.

Insurance companies are happy because they are selling insurance policies and are not having to deal with 'the man on the street' but with a knowledgeable insurance broker network that understands their products as well as they do.

Finally, the insurance brokers themselves are happy because they can retain their existing clients and sign up new clients thanks to their insurance industry and product knowledge, and are also well-compensated by the insurance companies for their efforts.

South African Insurance Brokers